Selftrade has issued an "intrusive" questionnaire to its customers as it seeks to meet money laundering regulations.
A letter sent this month by the execution-only stockbroker asks customers to supply personal and financial details, including the source of their wealth. The attached Records Review Form asks if wealth has been derived from employment, investment activity or inheritance, and the time frame and countries in which the wealth was generated. Selftrade has told clients that without this information "it may be necessary to suspend or restrict access" to their accounts.
IC readers have contacted Investors Chronicle to express their "shock and disbelief that a broker could treat its customers in so shoddy and threatening a manner" and to complain about the "far too intrusive questions".
A spokesperson for Selftrade said: "Selftrade is currently updating its customer records. As part of this process and in line with regulatory requirements, we are requesting our customers provide a range of information and documentation that may include proof of identity and residential address and details of their source of their wealth and funds. The nature of the information we request may vary from customer to customer and depends on the data we already hold on each customer, their trading activity and the accounts they hold with us.
"As an execution-only broker, Selftrade, like other financial services businesses, is required by its regulators to comply with a wide range of anti-money laundering laws, regulations, best practice guidelines and policies. All the information and documentation collected will be used solely for the purpose of meeting those regulatory requirements and will not be used for any other purpose."
In January 2013, Selftrade suspended taking on new customers on its platform after voluntarily varying its permissions following discussions with the regulator. At the time it said: "The board of Selftrade has resolved to undertake a review to enhance some of the firm's processes, which it is committed to completing as quickly as possible." It is not yet taking on new customers although existing investors can add to their accounts and transfer money in.
A year later, in January 2014 Selftrade axed its status as a bank, reducing its responsibilities under the Financial Services Compensation Scheme.